Defying the Grinch-like pall on the economy, downtown Napa will turn itself into a brilliantly lit fantasy land this holiday season.

Downtown property owners are paying to string more than three miles of lights across rooftops, trees, bridges and the new river promenade. Ribbons of white light will tie together the heart of downtown along First and Main streets with the Oxbow District east of Soscol Avenue.

“We’re never done anything like this,” Craig Smith, executive director of the Napa Downtown Association, said Tuesday.

Businesses are spending $125,000 for the purchase and installation of the LED lights, which generate a lot of sparkle without needing a lot of electricity, Smith said. The money comes from the annual assessments paid by commercial property owners to promote downtown.

Yes, the economy isn’t the best, but there is much to celebrate, Jeff Doran, chairman of downtown’s Property-Based Improvement District, said. Much of the riverfront has been reconstructed, major commercial projects are complete and flood protection work is done on all the major motor vehicle bridges, he said.

“Lights symbolize hope,” Doran said. “Hopefully it becomes symbolic of good years to come.”

Merchants hired Sierra Display of Fresno, a company that specializes in community lighting, to begin installing the lights two weeks ago, Smith said. The job will continue for some weeks to come.

The lights will be turned on at a public ceremony Nov. 25 at 6 p.m. at Veterans Memorial Park. The event’s centerpiece will be the illumination of a 29-foot Christmas tree.

Downtown hasn’t attempted a holiday tree for five or six years. Merchants gave up after small trees at Dwight Murray Plaza were vandalized, Smith said.

Downtown property owners decided it was time to try again, but this time do a big tree that residents could rally around, Smith said. “We’re tired of being bah-humbug. We have to have faith in people.”

Faith in humanity will be enhanced by video cameras, Doran said.

Over the past four years, downtown has spent PBID funds on such events as the Chefs Market, the Cajun Festival and the launch of the summer car show, Smith said.

In deciding to light up downtown in a big way, merchants asked themselves, “What could we do at Christmas that could really have an impact, to make people want to come downtown, to put them in the spirit?” Smith said.

“Obviously we hope this will attract people to downtown who will, in turn, shop,” Smith said.

The $125,000 price tag includes two years of maintenance by Sierra Display, which will take down most of the lights after the holidays and reinstall them in 2010, Smith said.

Until now, Yountville’s Festival of Lights has been the brightest star in the Napa Valley’s holiday makeover, Doran said. Downtown Napa’s new ribbons of lights should compare favorably, he said.